White House, GOP look for common ground

WASHINGTON -- In the first high-level meeting between top White House officials and the leaders of the new Republican majority in Congress, White House Chief of Staff Leon E. Panetta met yesterday with Sen. Bob Dole and Rep. Newt Gingrich in a search for common ground.

"We want to change how this town does business," Mr. Panetta said afterward.

A slight change in protocol revealed the shifting balance of power in this city: Mr. Panetta didn't play host to the Republican leaders in the White House. Rather, Mr. Panetta, bowing to the new political reality of Republican strength, went to Capitol Hill.

Sounding upbeat and conciliatory, Mr. Panetta described the session as a "very good meeting," adding, "We did talk about issues where we can achieve some agreement.

Those issues included the paring of congressional committees and staff, lobbying and campaign finance reform, the line-item veto and passage of the General Agreement on Tariffs and Trade (GATT).

Republicans teamed with the Clinton White House last year on the passage of another international trade accord, the North American Free Trade Agreement. Later, they complained bitterly that once the fight had ended, the president and his advisers returned to their partisan ways, refusing to consult meaningfully with Republicans on such crucial issues as welfare reform, health care and the crime bill.

President Clinton and administration officials indicated yesterday that they realize this strategy is no longer an option. But the White House sent conflicting messages as to which strategy it will pursue: compromise or confrontation.

In a breakfast meeting with reporters, Alice M. Rivlin, the White House budget director, maintained that Republican leaders have not been forthcoming about precisely what they would cut in order to finance the tax cuts they desire.

Her comments drew immediate fire from Rep. John R. Kasich of Ohio, who is expected to be the new Republican chairman of the House Budget Committee. For well over a year, Mr. Kasich has identified spending cuts he would like to make.

But the theme being sounded by White House officials was that they will try to work with the Republicans -- and that they know that if they can't work together, both parties will suffer voters' wrath.

In faraway Indonesia, the president himself signaled an inclination to back the Republicans' call for a constitutional amendment to allow prayer in public schools.

Mr. Clinton didn't commit outright, saying that he would need to see the specifics of the amendment drafted. But he said that he supports the idea, so long as students would not be coerced into praying or be required to say a specific prayer.

"What I think the country needs, and what I think the schools need, is a sense that there are certain basic values of citizenship, including valuing the right of people to have and express their faith, which can be advocated without crossing the line of separation of church and state and without in any way undermining the fabric of our society," he said.

"We do need a lot more changes, and we can do them together if we are determined to put America first and not put partisanship first."

It is clear, though, that the magnitude of last Tuesday's change has yet to be fully absorbed by some in the Clinton camp.

Hillary Rodham Clinton, speaking in the same city as her husband, said that regardless of last week's election returns, "I think the president has to stand for what he stood for, and has to stick with his principles and protect the progress that has been ++ made.

"I don't think the American public wants Medicare cut dramatically," she added. "I don't think they want to see the gains in cutting the deficit reversed" or loans for middle-class college students eliminated.

And at her breakfast meeting, Ms. Rivlin suggested that the Republican calls for a tax cut and a balanced budget are #F incompatible. At one point, she even seemed to question the advisability of a middle-class tax cut -- an issue that Mr. Clinton campaigned on himself in 1992.

"If we had a big tax cut right now and people were spending more, the inflation danger would be much more real than it is now," she said. "You'd have rapid increases in interest rates and probably throw the economy into a recession."

Ms. Rivlin said that it would be irresponsible for the Republicans to cut taxes unless they cut spending by the same amount. Mr. Panetta, despite his upbeat message, made the same point in his meeting with Mr. Dole and Mr. Gingrich, telling reporters afterward: "The important thing is that [tax cuts] be paid for and not increase the deficit."

But Republicans signaled this week that tax cuts -- big ones -- are coming and that Mr. Clinton and his budget director can follow, lead or get out of the way.

"I think the American people said on Tuesday that they wanted the taxing, the spending and the regulating, which has been the hallmark of the Clinton administration, to stop," said Sen. Phil Gramm, a Texas Republican already talking about running for president in 1996.

"I think it's up to the president. I heard their message, as he did. If he wants to get on the train, be the engineer . . . I will be happy to ride on the train. If he wants to wave from the station, we'll wave back. If he wants to get on the tracks and try to stop the train, I think we can probably deal with that, too."